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Unformatted text preview: 1 Unemployment and Wages Measuring unemployment and the unemployment rate Discouraged workers and hidden unemployment Causes and Policies Structural, frictional and cyclical unemployment Natural Rate of unemployment & NAIRU Nominal and real wages and productivity 1 International Comparisons unemployment blues , the unemp game show News? 2 Course Issues Office Hours this week Weds 2:45-4pm (not 10-12) Investment Game Round 4 Bonds Summarize results 3 Extra Credit Keynes, Return of the Master, Skidelsky Check grades in Gradebook! Final Exam Info next week Clicker Points- late reg, etc. 2 Macroeconomic Unemployment Policies - Should they be Used? Keynesian Demand Management Policies Unstable economy Counter cyclical unemployment monetary/fiscal policy Unstable economy stuck below full employmen 4 Unstable economy, stuck below full employment Classical/Monetarist In the long-run economy will settle at equilibrium at natural (full) rate of unemployment (NAIRU) Stabilization policy unnecessary and ineffective (lags, rational expectations) Reduce structural and frictional causes: minimum wages, training, etc Government policies are the problem, not the solution Minimum wage laws, regulations, etc 5 Harm of Unemployment - "central social concerns of modern capitalism" Wasted resources...
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